Tue, Sep. 29, 6:06 PM
- Munich Re says that Berkshire Hathaway (BRK.A, BRK.B) had cut its stake in the German reinsurance company, to 9.7% from about 12% -- a money-where-your-mouth-is backing of Warren Buffett's feeling that reinsurance has taken a turn.
- Buffett had invested in Munich Re and peer Swiss Re (OTCPK:SSREY) from 2008 to 2010, at the end of which Berkshire triggered the 10% reporting threshold.
- But at Berkshire's annual meeting in May, Buffett said the reinsurance peak was "history": “It’s a business whose prospects have turned for the worse and there’s not much we can do about it."
- Recently, Berkshire also said it had bought another 3.5M shares of Phillips 66, bringing its beneficial ownership to 61.5M shares.
Thu, Sep. 10, 7:56 AM
- Berkshire Hathaway (BRK.A, BRK.B) discloses the purchase of another 3.5M shares of Phillips 66 (NYSE:PSX), bringing its total stake in the company to 11.4%.
- The latest series of purchases, made during Sept. 4-9, brings BRK's beneficially owned shares to a total of 61.5M.
- The additional 3.5M shares are worth ~$282M at Wednesday's closing price of $80.65; including the newly-purchased shares, BRK's stake is now worth $4.9B.
- Earlier (Aug. 29): Berkshire returns to energy sector with $4.5B stake in Phillips 66
Tue, Sep. 8, 11:55 AM
- "I've still got money left to buy," says Warren Buffett (BRK.A, BRK.B), appearing on CNBC. "I never go below $20B in cash."
- On the Fed: "I've never made a decision based on what the Fed is going to do or not do." However, he puts on his FOMC hat and says he wouldn't be very aggressive on rate hikes. The economy, Buffett says, is growing at a steady, but not booming rate.
- On IBM: He purchased more shares in Q3.
- On BAC: Buffett would vote in favor of CEO Brian Moynihan retaining the chairman role. He's done a "first-class job," says The Oracle.
Sat, Aug. 29, 12:10 AM
- Berkshire Hathaway (BRK.A, BRK.B) discloses a $4.5B stake in Phillips 66 (NYSE:PSX), as Warren Buffett takes a renewed interest in the energy industry after appearing to pull back from the group.
- Berkshire holds nearly 58M shares after purchases this week, or more than 10% of the total outstanding, according to an SEC filing late Friday.
- Earlier this month, Berkshire did not disclose an investment in PSX at the end of Q2 but said it had omitted some data that was reported confidentially to the SEC, which sometimes allows companies to withhold information from the public to limit copycat investing while a firm is building or cutting a position.
- The most recent figure BRK had given for a PSX investment was a 7.5M-share stake at the end of Q1.
- PSX shares fell below $70 on Monday amid the broad selloff before rebounding to end the week at $77.23.
Mon, Aug. 24, 7:47 PM
- Geico (BRK.A -3.2%, BRK.B -3.4%) will pay $6M to settle insurance discrimination charges first brought up by the Consumer Federation of California against the company.
- Geico was charged with quoting inflated rates to women, low-income and non-professional-level applicants. The company agrees not to consider education and occupation in sorting coverage limits via a three-year settlement.
- The payout could double to $12M if Geico's found to be not in substantial compliance.
Fri, Aug. 14, 6:10 PM
- Along with Warren Buffett cutting stakes in energy (but leaving Berkshire's "Big Four" alone), the latest 13F filing shows a telecom/media changeout as well.
- Berkshire Hathaway (BRK.A, BRK.B) boosted its stake in Charter Communications (NASDAQ:CHTR) -- itself in the process of buying out Time Warner Cable (NYSE:TWC) -- by 42%, to about 8.5M shares ($1.5B worth).
- In the other direction, its stake in Viacom (VIA, VIAB) declined by 32%, to about $250M worth.
- A notation that confidential information has been omitted suggests a secretive stake is being built -- Berkshire used such a notation while building an IBM stake in 2011 -- but confirmation won't come for three months, in mid-November.
- After hours: VIAB +0.8%; CHTR +0.1%.
- 13F filing
Fri, Aug. 14, 5:56 PM
- Berkshire Hathaway (BRK.A, BRK.B) disclosed in its latest 13F filing that it sold off its shares in Phillips 66 (NYSE:PSX) and National Oilwell Varco (NYSE:NOV) during Q2, as it continued to cut its positions in energy companies.
- Meanwhile, BRK kept unchanged its stakes in its “Big Four” holdings American Express (NYSE:AXP), Coca Cola (NYSE:KO), Wells Fargo (NYSE:WFC) and IBM.
- Warren Buffett seemed to hint during a CNBC interview this week that BRK may have built up its IBM stake in the current quarter, saying "I love it when it goes down" when asked whether he was concerned about the stock’s recent performance.
- Buffett’s only new stake in the quarter was a 20M-share investment in auto paint maker Axalta Coating Systems (NYSE:AXTA), which BRK bought from Carlyle Group.
Tue, Aug. 11, 4:12 PM
- Berkshire Hathaway's (BRK.A, BRK.B) AA credit rating along with that of its insurance subsidiaries have been placed on CreditWatch Negative by S&P.
- At issue is uncertainty over how Berkshire's announced $37.2B acquisition (debt included) of Precision Castparts will be funded, and S&P expects The Oracle to use some of the capital resources available at his insurance units, which could affect their ratios.
- S&P will monitor and expects to update or resolve the CreditWatch negative listing within the next 90 days.
- Previously: Buffett pays high price for Precision Castparts (Aug. 10)
Mon, Aug. 10, 5:47 PM
- Effective with its September rebalance, S&P is going to allow some multiple share class lines to be listed separately in its indices, rather than consolidated lines -- meaning that both classes of Comcast (CMCSA, CMCSK) and Twenty-First Century Fox (FOX, FOXA) will be included in the S&P 500 after the close Sept. 18.
- All multiple-class companies that have listed share class lines will be adjusted for share and float per each line. Multiple share class companies that have an unlisted class line will be adjusted as well.
- There are four companies in the S&P 100 with two or more publicly listed lines: Google is already represented by its two lines. Comcast and Fox will have their additional lines added. Berkshire Hathaway (BRK.A, BRK.B) will be an exception due to liquidity concerns, and share count will be consolidated under the B line.
- With the S&P 500, Discovery Communications (DISCA, DISCK) is also already represented by two lines in the index. News Corp. (NWS, NWSA) will have both its share lines listed. The end result is 500 companies in the index, and 505 trading lines.
Mon, Aug. 10, 11:28 AM
- Berkshire Hathaway's (BRK.A -0.7%; BRK.B -0.6%) $37B purchase of Precision Castparts (PCP +19.1%), combined with Berkshire's FQ2 earnings report that showed profit fell 37% due to higher costs at its insurance units, appear to be striking an off note with the company's investors, sending shares lower.
- It's the biggest deal of Warren Buffett's career: BRK is paying $235/share for PCP, a 21.2% premium over Friday's closing price and 18x projected profit over a 12-month period.
- "I'm not crazy about paying $30B for a $1.5B earnings stream of a cyclical company supplying airplane makers," says Jeff Matthews, a principal at hedge fund Ram Partners and author of a book about Buffett.
- Buffett tells CNBC that Berkshire will use $23B of its own cash and borrow ~$10B to fund the deal, which he says will be the last one his firm undertakes for roughly a year as it rebuilds its cash pile.
Mon, Aug. 10, 7:12 AM
- Berkshire Hathaway (BRK.A, BRK.B) confirms it will acquire Precision Castparts (NYSE:PCP) for $235 per share in a transaction valued at $37.2B, inclusive of debt.
- A closing is expected in Q1 of 2016.
- Previously: Berkshire Hathaway nears $30B deal for Precision Castparts (Aug. 09 2015)
Sun, Aug. 9, 7:54 AM
- Berkshire Hathaway (BRK.A, BRK.B) is nearing an agreement to buy Precision Castparts (NYSE:PCP), in what could be the conglomerate's largest acquisition ever.
- Given typical premiums, the price tag for the industrial firm, which had a market value of $26.7B as of Friday's close, could exceed $30B.
- Berkshire already owns 3% of PCP, and is its largest shareholder. A deal may be announced as soon as this week.
Fri, Aug. 7, 5:54 PM
- Rail traffic fell in July from a year ago as an increase in container volumes could not offset a sharp decline in oil and coal shipments, according to the latest monthly report from the Association of American Railroads.
- The number of carloads carrying oil and petroleum products fell 13.6% Y/Y to 67.9K last month, while coal volumes sank 12.5%; container shipments rose 3.8% to 1.2M, and traffic overall fell 1.8% to 2.7M.
- "Railroads are overexposed, relative to the economy in general, to the energy sector,” the AAR says in its traffic report.
- Relevant tickers: CSX, NSC, UNP, KSU, BRK.A, BRK.B
Fri, Aug. 7, 5:14 PM| Fri, Aug. 7, 5:14 PM | Comment!
Mon, Jul. 27, 6:57 PM
- Some of the biggest and best known U.S. businesses join the Obama administration in trying to build momentum for a deal at the climate change summit in Paris later this year.
- A dozen publicly traded companies - AA, AAPL, MSFT, BAC, BRK.B, KO, GM, GS, GOOG, PEP, UPS and WMT - committed to support a “strong" outcome in Paris, and made new pledges to take a variety of steps to tackle climate change.
- For example, Alcoa says it will reduce absolute greenhouse gas emissions in the U.S. by 50% by 2025, and BRK plans to retire 75% of its coal-fueled generating capacity in Nevada by 2019.
- In addition to company-specific goals, the White House says today's announcements total at least $140B in new low-carbon investment and more than 1,600 MW of new renewable energy.
Sat, Jul. 25, 8:02 AM
- "I'm scratching my head about Berkshire (BRK.A, BRK.B), says Barclays analyst Jay Gelb, who rates the stock an Overweight with a price target 22% higher than the current level. "The earnings power is stronger than ever, the company has done a series of attractive acquisitions, and it just closed on Kraft. None of that is reflected in Berkshire’s valuation.”
- To review: The Oracle invested $4.25B of Berkshire money for a 50% equity stake in the $23B buyout of Heinz two years ago. Berkshire made another $5B equity investment when Kraft purchased Heinz this year, and now has a 25% stake in the new Kraft Heinz (NASDAQ:KHC) worth $25B. It's a $16B gain in two years - a score P-E giants can only dream about, writes Andrew Bary in a bullish front page article in Barron's.
- Berkshire's stock, however, is lower by 6% this year, underperforming the S&P 500 by 700 basis points, and trades at less than 1.5x March 31 book value. The downside here is likely limited, says Bary, thanks to Buffett's promise to aggressively buy back stock at 1.2x book value.
- Succession fears are one obvious reason Berkshire doesn't trade higher, but it also appears as if Buffett's stock-picking skills have eroded. Of Berkshire's four largest holdings - AmEx, Coca-Cola, IBM, and Wells Fargo - only Wells has beaten the S&P 500 over the last three and five years. IBM is worth less than he paid for it in 2011, and Coke still hasn't taken out its 1998 peak. There was also the Tesco boner, which Buffett exited last year. Berkshire has done way better when acquiring whole companies.
- On succession, Bary's bet is with Berkshire Hathaway Energy chief Greg Abel over reinsurance head Ajit Jain. At age 53, Abel is 11 years younger than Jain, has headed a conglomerate, and is comfortable in the public eye.
BRK.A vs. ETF Alternatives
Berkshire Hathaway Inc is a conglomerate holding company owning subsidiaries engaged in a number of business activities, including property and casualty insurance and reinsurance, utilities and energy, finance, manufacturing, service and retailing.
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